In the event that an investment finance company has acquired real estate at a successful bid by exercising the security right by means of the recovery of bad debts, whether the registration accordingly is subject to heavy registration tax.

Since the real estate acquired at the time of auction by the investment finance company by exercising the security right by means of taking off bad debts related to its lending business, it shall not be deemed that the company acquired the real estate for the continuous use in its business, the registration of such acquisition shall not be subject to the registration tax of Article 102 (2) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 11751 of Aug. 26, 1985).

Article 138 (1) 3 of the Local Tax Act; Article 102 (2) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 11751 of Aug. 26, 1985)

Supreme Court Decision 85Nu630 Decided January 21, 1986

Daegu Investment Finance Corporation

Head of Daegu Metropolitan City/Dong-gu

Daegu High Court Decision 85Gu123 delivered on June 21, 1985

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant litigant are examined.

According to Article 102 (2) of the Enforcement Decree of the Local Tax Act, "real estate registration after its establishment, establishment, and transfer" under Article 138 (1) 3 of the Local Tax Act, which is subject to taxation of registration tax, means all real estate registration (including registration of acquisition of land for non-business use of a corporation) acquired by a corporation or a branch office, etc. to use for its business within five years after its establishment, establishment, transfer, and transfer. Therefore, real estate registration meeting the above requirements is land for business use of a corporation or land for non-business use, or is subject to heavy taxation regardless of whether it is land for non-business use. However, since it is necessary for a corporation to use for its business, if the corporation acquires the ownership of secured real estate temporarily through the exercise of its security right without its purpose, the registration of acquisition shall not be deemed the real estate registration acquired by the corporation for its use for its business. Therefore, registration of

According to the reasoning of the judgment below, the court below held that the acquisition registration is not a real estate registration subject to taxation of the registration tax, since the plaintiff was a juristic person established with the purpose of issuing bills and debentures, discount and trading of bills, acceptance and guarantee of bills, and intermediation of sale and purchase of bills, etc., and the real estate of this case was acquired at a time by exercising the security right in connection with the act of lending credit, but the plaintiff did not have acquired the real estate of this case at a time for the purpose of continuous use in the business. In light of the above stated reasoning, the court below did not err in the misapprehension of legal principles as to the interpretation and application of the heavy registration tax, as

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jong-soo (Presiding Justice)